Lynsey Mitchell is head of sales and development at SPML
“A lot of borrowers are feeling the consequences of recent Base Rate rises, particularly those who have slipped onto a standard variable rate (SVR). Tim has experienced relatively minor credit problems, but he would probably be turned away by many high street lenders. It makes sense that he is thinking about trying to fix his rate again, and quickly, with more rate rises expected.
SPML has a one-year fixed rate mortgage designed for borrowers who need a short-term fix to help improve their credit profile. If Tim can keep on track for the next 12 months, his credit rating will be improved. As his credit problems were within the last six months, he will be eligible for the near-prime product, starting at 6.09 per cent with no extended tie-in.
With the option of using an automated valuation model (AVM), the remortgaging process should also be quicker, getting Tim away from his current SVR.
Arron Bardoe is sales director at Flexible-Mortgage.net
“For this case, I will assume Tim’s required loan-to-value (LTV) is below 90 per cent, that his income covers the proposed loan and the defaults are not sizeable.
As Tim has a good mortgage payment record, I would look to Abbey and its two-year fixed rate at 5.14 per cent, with a £999 fee and no valuation or legal fees.
Our current experience shows Abbey would process this quickly, especially if it fits with the lender’s AVM criteria and is presented well.
To minimise Tim’s payments on the SVR, I would maintain proactive contact with the solicitor, as this has enabled us to complete a number of mortgage cases in less than two weeks.
I would also discourage Tim from adding the defaults to the mortgage and to maintain his existing payment plans, unless this is unaffordable and consolidation is essential to his budget.”
Alan Lakey is a partner at Highclere Financial Services
“Many options are available to Tim, but they will be dependent on the LTV.
It is likely that the property value has risen over the past three years. While no income figures have been provided, this is not likely to cause any problems as no additional funds are being borrowed. Many lenders will be prepared to lend on a like-for-like basis, even if income multiples are being stretched.
One lender I would consider is Advantage. On its adverse range, it ignores all defaults and this will qualify Tim for its Near-Prime Plus range. He could obtain a two-year fix of 6.09 per cent up to 80 per cent of the property value, 6.24 per cent up to 85 per cent and 6.34 per cent up to 90 per cent.
As Advantage uses a generous DTI (debt to income ratio), Tim’s income requirements are likely to be met.
While a speedy process is required, it is far more important to engage the correct lender and product rather than skimp and save a few weeks.”
